About a quarter of companies worth more than US$500 million choose to pay their employees the same regardless of their current location, according to a recent survey by Carta.
As more workers work remotely, organizations face the dilemma of paying remote workers the same as those living in expensive metropolitan areas.
Carta’s survey found that salaries for employees of tech start-ups in Seattle are now equal to those of workers in San Francisco, a revelation that shows that salaries are now leveling albeit for startups.
While about 35% of new hires in 2019 were based in a state other than the company’s headquarters, Garta said the number has risen to 62% in 2022.
“As remote work becomes a fact of life, [startup] founders are increasingly faced with a key decision: should they adjust compensation by location? The vast majority of companies (84%) do take location into account when deciding on compensation packages,” the Carta report states.
For Amy Stewart, senior content marketing manager at Payscale, Carta’s report is probably true and not surprising, especially as it relates to startups.
“Technology startups are smaller and more agile, and there’s a lot more incentive for them to reduce costs and find ways to attract top talent. Tech talent in particular is attracted to the ability to work flexibly and to work from home,” Stewart said.
The sources for this piece include an article in ComputerWorld.